MD Establishes a Study to Evaluate Blockchain–Based Real Property Lease & Title Recordation & Verifi

FOR YOUR PRACTICE | PROPERTY LAW

MARYLAND ESTABLISHES A STUDY TO EVALUATE BLOCKCHAIN–BASED

Real Property Lease and Title Recordation and Verification

BY COLLEEN M. ARACRI, ESQ.

FOLLOWING A ROBUST LEGISLATIVE

debate, the Maryland General Assembly passed Senate Bill 168. Governor Moore signed the bill into law in May 2026. Sponsored by Senator Watson, this new statute establishes the Blockchain-Based Real Property Title Pilot Program within the State Department of Assessments and Taxation (SDAT).

The enactment of Senate Bill 168 marks a historic shift in Maryland’s approach to property recordation, balancing the pursuit of technological modernization against significant concerns raised by state agencies, legal professionals, and consumer advocates regarding the feasibility and security of distributed ledger technology.

Legislative Framework and Objectives The statute defines a “blockchain” as a distributed ledger technology that provides a secure, immutable, and transparent method for recording and storing data. Under the pilot program, property track records are mirrored via a “digital title,” defined as a cryptographically secured token or smart contract that represents ownership of real property within the state.

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The statutory mandate of the program focuses on two core objectives: To evaluate the operational utility of blockchain technology for securely recording and verifying real property ownership and leases.

To assess the technology’s capacity to assist law enforcement agencies and the judiciary in resolving real property ownership disputes, specifically involving “squatting.” The law explicitly defines squatting as the unauthorized occupation of real property by an individual who does not have legal title, a lease, or the right of possession.

The law, which took effect on June 1, 2026, mandates that by December 31, 2026, SDAT, in coordination with the Maryland Judiciary, the Maryland State Police, local law enforcement agencies, and the Office of the Attorney General, Maryland Legal, Aid, the Public Justice Center, the Maryland Blockchain Association, and third–party technology vendors, must report the results of the study to the Governor and the General Assembly.

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Proponents Highlight Anti-Squatting Capabilities Supporters of the legislation, including Senator Johnny Ray Salling and Maryland REALTORS®, aggressively advocated for the bill’s passage as a vital mechanism to combat fraudulent leasing and real estate squatting. According to testimony submitted by Lisa May on behalf of Maryland REALTORS®, real estate professionals reported a notable increase in scammers illegally occupying residential properties, particularly vacant homes, properties listed for sale or rent, or residences where owners are temporarily away.1 When confronted by property owners or law enforcement, these unauthorized occupants

frequently produce highly sophisticated forged leases.2 Because responding police officers face extreme difficulty independently validating the legitimacy of a lease on-site, property owners are routinely informed that the standoff is a civil matter, forcing them into expensive legal battles that delay property recovery for weeks or months.3 Advocates view this blockchain registry as a technological continuation of the General Assembly’s prior anti-squatting efforts, notably

mgaleg.maryland.gov/cmte_testimony/2026/bat/1GbkgU1oR7cpQgcZFLpQIbJ5Mp4EMAtoj.pdf Id. Id.

2025’s Senate Bill 46, which expedited judicial “wrongful detainer” eviction claims down to a 10-day timeline.4 They also believe that an immutable blockchain registry will provide law enforcement and courts with instantaneous, unalterable validation of true ownership, cutting through document forgery and allowing immediate enforcement of property rights.5 Agency Concerns: Structural and Fiscal Disruption

trained Clerks of the Circuit Court are the explicit custodians of land record instruments.11 Court officials warned that the pilot program effectively shifts custodianship of these constitutional instruments from the Clerks to SDAT.12 Fiscal and Technological Projections The fiscal notes submitted by state administrators indicate a steep financial burden for implementation:

Despite the bill passing into law, the state agencies tasked with managing Maryland property records were strongly opposed to it throughout the legislative process, raising critical concerns about data custodianship and operational costs.

SDAT Cost Projections: The department estimates that implementation will cost the state over $3 million.13 Furthermore, because processing title information is completely alien to the agency’s operational capabilities, SDAT will be forced to hire entirely new staff possessing highly specialized technological and real estate title expertise.14

The Institutional Purview Conflict In a Letter of Information submitted by Robert Yeager, Director of the Maryland Department of Assessments and Taxation, it was clarified that SDAT’s primary, statutory function is the valuation of property for assessment and taxation purposes.6 Director Yeager noted that the agency does not handle, record, or maintain property titles.7 Under the current state architecture, title recordation falls exclusively under the purview of the Clerks of the Circuit Court across Maryland.8 SDAT only obtains title data by scraping it from existing public land records to facilitate its tax assessments.9 The Maryland Judiciary echoed these administrative concerns in a memorandum submitted by Suzanne D. Pelz, Esq., on behalf of the Legislative Committee of the Maryland Judicial Council.10 The Judiciary emphasized that under Article IV of the Maryland Constitution and Title 3 of the Real Property Article, locally accountable, judicially supervised, and legally

Judiciary Cost Projections: The Maryland Judiciary noted that building and supporting the real-time API connection to SDAT will require an estimated initial expenditure of at least $148,000.15 Court administrators cautioned that this baseline figure does not account for necessary process modifications or design changes, and expressed skepticism regarding whether the system can be operational by the mandated January 1, 2027, start date.16 Opponents Challenge Tech Risks and Underlying Arguments Public interest groups and technology experts strongly urged the legislature to reject the measure during committee hearings,

4 Id. 5 mgaleg.maryland.gov/cmte_testimony/2026/bat/1qF55matwvn_OFtPZPdIWl8GTpZ83IeDf.pdf 6 mgaleg.maryland.gov/cmte_testimony/2026/bat/1JDQcVuzl0YXWRFaEfPrv0_pNsqhMQpd4.pdf 7 Id. 8 Id. 9 Id. 10 mgaleg.maryland.gov/cmte_testimony/2026/bat/1arZWd76RzgwQycx7OtbCnWtAlQNHz2oA.pdf 11 Id. 12 Id. 13 mgaleg.maryland.gov/cmte_testimony/2026/bat/1JDQcVuz,,l0YXWRFaEfPrv0_pNsqhMQpd4.pdf 14 Id. 15 mgaleg.maryland.gov/cmte_testimony/2026/bat/1arZWd76RzgwQycx7OtbCnWtAlQNHz2oA.pdf 16 Id.

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The Judiciary emphasized that under Article IV of the Maryland Constitution and Title 3 of the Real Property Article, locally accountable, judicially supervised, and legally trained Clerks of the Circuit Court are the explicit custodians of land record instruments.11

categorizing blockchain as an unstable database system that fails to solve the specific real estate issues it aims to fix.

Ineffectiveness in Landlord-Tenant Disputes Opponents argue that a blockchain title ledger is functionally blind to the nuances of actual squatting and eviction cases. Written testimony submitted by C. Matthew Hill, an attorney with the Public Justice Center, asserted that the overwhelming majority of alleged squatting disputes do not center on whether the plaintiff owns the property, but rather on whether the occupant is a legitimate renter.17

changing the database format to blockchain does not inherently eliminate operational delays.22 If modernization goals such as standardized, real-time public APIs or streamlined digital workflows are desired, the state can implement those directly into existing land record architectures without a blockchain rollout.23

If an occupant has an active tenant relationship or an unverified agreement, an owner must seek recourse through standard landlordtenant civil courts.18 Because residential rental leases are not legally required to be recorded in public property registries, a blockchain title system cannot verify whether an occupant’s physical lease was legitimately executed by the owner.19

Consumer advocates from the Economic Action Maryland Fund, in testimony submitted by Deputy Director Jennifer Bevan-Dangel, also warned that the technology is far too emergent to handle critical public asset records.24 Their testimony highlighted severe structural security threats, explaining that public blockchains are operated by voluntary network members who can undermine ledger security and record conflicting versions of a transaction.25 Pointing to a history of network failures, intentional hacks, and the ongoing threat of localized power grid failures, consumer advocates warned that placing irreplaceable real property titles on an electronic ledger risks permanent data loss.26

Technological Vulnerabilities and Alternatives

Conclusion

Expert testimony from Dr. Jonathan G. Harris, a Computational Chemistry PhD and Chartered Financial Analyst with extensive experience leading computational risk and financial anti-fraud teams, further challenged the bill’s technological arguments. Dr. Harris stated that blockchain technology offers no unique utility or computational superiority over established, simpler database architectures.20 He noted that a forged deed can be uploaded or entered into a blockchain transaction just as seamlessly as in any traditional database; the underlying ledger can track the entry, but it cannot authenticate the document’s physical truth.21

The enactment of Senate Bill 168 represents an ambitious attempt by the Maryland General Assembly to explore cutting-edge solutions to real estate fraud and to address limitations in recordation workflows.

However, the program must navigate significant administrative friction, steep fiscal demands, and underlying skepticism from both legal and computational experts.

Furthermore, Dr. Harris argued that ongoing data processing lags are a matter of workflow and document intake, not database architecture; 17 mgaleg.maryland.gov/cmte_testimony/2026/bat/1k3ncFqhar5-tdybGU1Qw-dA_ME3T4WLm.pdf 18 Id. 19 Id. 20 mgaleg.maryland.gov/cmte_testimony/2026/bat/1WqsRjmxhgv3fYJRN59dd-Ta0XnzrW9S3.pdf 21 Id. 22 Id. 23 Id. 24 mgaleg.maryland.gov/cmte_testimony/2026/bat/1guBx0gJ7z5q0vbFfqRO95zUfIGMhmoS6.pdf 25 Id. 26 Id.

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As state agencies, public interest groups, and technology experts collaborate to compile their findings, the legal community will wait to see whether the blockchain-based real property title program delivers on its promise. Ultimately, the upcoming year-end legislative report will help determine whether blockchain technology will reshape real property practice in Maryland.